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If you're thinking about buying a house or refinancing a loan, you probably know the sobering realities in the mortgage market: thanks to strict federal rule changes in the wake of the housing bust, it can be tough to qualify for a loan.

 

That's especially true if you don't quite fit the mold — you don't conform to all the underwriting mandates on credit, income, debt-to-income ratio and other criteria. You can handle the payments, but issues in your credit history and application push borrowers “outside the box” that defines Qualified Mortgages, or “QM”.

 

Options

 

That being said, a small but growing number of lenders have begun offering mortgages with more flexible terms designed for borrowers that don’t meet the stringent requirements set up by the Consumer Finance Protection Bureau. Borrowers with solid credit scores and/or money in the bank but that student loans or uninsured medical bills push debt-to-income ratios over the maximum that federal rules generally prescribe have programs open to them.

 

 

 

 

Self-Employed

Self-employed borrowers have options, as well as anyone who did a short sale on their underwater home a couple of years ago too recently to meet the four-year minimum wait time prescribed by Fannie Mae or Freddie Mac before you are allowed to obtain a new mortgage.

 

 

 

 

Waiting

Borrowers may choose to wait until their credit improves, their job is stable, or the prescribed waiting period is over. But another option for "near-miss" applicants or potential applicants nationwide has begun taking shape: "non-Qualified Mortgage" or non-QM lending. Interest rates are higher than the standard market, but certain programs are being created to help certain borrowers – and that helps the housing market. 

 

 

 


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